The Utility Veteran’s Choice of Energy Storage – Energy Storage Report

September 28, 2016

New ESS board member & utility veteran Mike Niggli discusses the importance of long-duration energy storage and solar for utilities with Jason Deign of Energy Storage report. Check out the full article here.

Utility veteran michael niggli’s decision to join the board of flow battery maker ess is a vote of confidence for long-duration storage.

Utility veteran michael niggli’s decision to join the board of flow battery maker ess is a vote of confidence for long-duration storage.

By Jason Deign

An executive appointment last month has signalled increasing confidence in the ability of flow batteries to tap into the promising market for long-duration energy storage.

Michael R Niggli, the former president and chief operating officer of San Diego Gas & Electric (SDG&E), joined the board of all-iron flow battery maker ESS Inc. amid a growing focus on storage applications exceeding four hours of duration.

“As the renewable energy trend continues to reach penetration levels of 25% to 35% and potentially well beyond, it’s evident that the impact on local distribution networks, and the entire grid, is going to be pretty profound,” Niggli told Energy Storage Report.

“That suggests there is a growing need for need for medium and long-duration storage.”

Electrical energy storage’s current focus on short-duration applications, such as frequency response, is partly a consequence of the still relatively low penetration of renewables in most grids and a need for ancillary services. 

Longer-duration tasks

Going forward, however, Niggli said the greatest opportunity for financial returns was in longer-duration tasks.

Studies forecast energy storage could deliver USD$250bn in benefits across 17 different applications in the next 10 years, he said. Of this, $205bn represented opportunities that could be tapped through flow battery technologies.

“I’ve seen figures that suggest the crossover point between [short- and long-duration] technologies is rapidly approaching and the potential for flow batteries to achieve this point is high,” said Niggli.

There are good reasons to go along with this view.

Although there are theoretically a number of different technology categories that can deliver long-duration storage, many of the alternatives to flow batteries suffer from drawbacks. 

Lowest-cost resource

Pumped hydro, for example, is by far the most widely used and lowest-cost resource for long-duration storage but suffers from high capital expenditure requirements and location and permitting restrictions.

Furthermore, the cost of pumped hydro is probably already as low as it could get, and costs could in fact go up in the future as suitable sites get harder to find.

Similar problems face compressed air energy storage, along with the fact that its use so far has been restricted to relatively few projects around the world.

Another potential long-duration contender, thermal energy storage, similarly seems to be having a tough time gaining mainstream acceptance.

In contrast, flow batteries’ similarities with traditional battery systems are increasingly making the technology a target for developers keen to provide electricity storage services with longer-duration capabilities. 

Suited to distributed applications

Another bonus for flow batteries compared to pumped hydro, compressed air or thermal energy storage is that they are well suited to distributed applications.

Research suggests these will become the norm in the near future, and they are ones that frequently demand a combination of energy and power delivery that flow batteries seem highly qualified to offer.

And on levelised cost of storage (LCOS), flow batteries are well qualified to compete with mainstream battery options such as lithium-ion.

“Flow batteries can absolutely beat the cost of lithium-ion on LCOS for longer-duration storage applications,” Niggli said.

“ESS’s all-iron flow battery, in particular, can dramatically lower the levelised cost of storage with its safe and scalable chemistry.”

Nevertheless, there are lingering concerns over the safety of some flow battery chemistries. Others, such as those based on vanadium, could be susceptible to materials shortages when manufactured at scale.

These concerns about safety and cost led Niggli to join a team developing an all-iron electrochemistry instead of other flow battery variants. “They’re solving the right problem,” he said.

“I was very intrigued by the fact that [the batteries] are entirely benign.” 

Lower storage costs

As well as insulating ESS against the possibility of reputation-damaging safety incidents, the all-iron chemistry means raw materials are cheap and easy to come by.

This translates into lower upfront and operating storage costs, and greater scalability.

Niggli said he took several additional factors into account, including the safety of the inherent design, with no chance of adverse chemical reactions or fires, and ESS’s zero footprint from a hazard and environmental standpoint.

Finally, said Niggli: “The ESS folks have a very strong founding team and a robust and growing intellectual property portfolio. That was important to me.”

Niggli’s focus on executive excellence is hardly surprising given his own pedigree. 

Curriculum includes senior posts

Besides leading SDG&E, his curriculum includes senior posts at Sempra US Gas & Power, NV Energy, Sempra Generation, Nevada Power Company, Sierra Pacific Resources and Entergy Corporation, among others.

A power engineering graduate from San Diego State University, he has also authored many articles on the utility business and provided expert testimony before legislative committees and public service commissions.

Having been in a buyer’s position for products such as the ESS flow battery means Niggli is uniquely placed to understand what might motivate utilities to choose a given long-duration storage option.

And he clearly thinks there is potential for success at his new corporate home.

“The utility business has been around 100 years but this is probably the most exciting three years we’ve ever seen and the deployment of energy storage is at the heart of this dramatic rethinking about the utility business model,” he said.

“I expect the next five to 10 years will be even more exciting.”

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